The European Union and New Zealand have concluded a free trade agreement that will increase bilateral trade by 30 percent. Both trading partners are abolishing nearly all import tariffs. The free trade agreement has been negotiated for more than four years.
According to European Trade Commissioner Valdis Dombrovskis, the agreement heralds a “new generation” of trade treaties, in which punitive measures are included for the first time if the other party violates fundamental labor principles or the Paris climate agreement.
Provisions on sustainable food systems, gender equality, and the reform of fossil fuel subsidies have also been included for the first time.
The agreement with tariff-rate quotas (TRQs) includes significantly greater access to the EU market for New Zealand dairy, sheep meat, and beef. The European agricultural umbrella group Copa-Cogeca describes this as ‘painful compromises for sensitive sectors.’ This will only increase the European negative trade balance (approximately €750 million in 2021) in agriculture.
Moreover, the concession of an additional 38,000 tons for sheep meat comes on top of the current market access based on WTO criteria of 114,184 tons. According to Copa-Cogeca, this raises serious concerns about the cumulative impact of concessions granted by the EU to New Zealand.
European products, such as wine and pork, are already present in the relatively small New Zealand market (4.8 million inhabitants), leaving little room to further balance the agricultural trade deficit, the European agricultural umbrella fears.